tv On the Money With Maria Bartiromo CNBC April 21, 2013 7:30pm-8:00pm EDT
hi, welcome to "on the money." we're taking a look at the impact of boston's tragic events on the security infrastructure next. a top former counterterrorism official will join me on what is keeping you safe. >> one of the toughest weeks of the year for the market, correction or spring swoon? what the volatility means for business and your money. >> changing times for the news industry is the printed word history. a ceo with experience says newspapers are good business in the digital world. and "on the money" begins right now!
here is a look at what is making news, a new week on the money. we learn more about the boston bombing and investigation and wild ride taking place on wall street. all three major averages starting with the worst one day decline of year followed by more declines as investors worry about a selloff in commodities and weaker economic reports. the worst week of 12013 this week. wall street's headline. busy week of earnings season. 80 companies in the s & p, reported their first quarter. many beating expectations, showing slim growth. ibm and intel fell short. microsoft, google and yahoo! topped expectations. bank of america well fell short of estimates. yet were hyigher than a year earlier. is apple losing its shine?
the tech bellwether dipped below $400 a share this week. seven months after hitting a record high of above $700 a share. concerns that product sales will not be keeping up with a possible glut of inventory there. exxon mobile surpassed apple as the most valuable company. sea world made a splash. the company began trading friday. with an ipo of, priced at $27 a share. the deal raised some $700 million. austerity persisting in britain and europe despite forecasts of downgrade growth in the uk and recession in single currency euro zone. from the spring meetings of the imf and world bang. -- imf and world bank. part of the conversation this week.
>> it has vastly different social security systems, health care systems, pension systems. if europe wants to move to common funding of the systems, a fiscal union, then they need to harmonize the systems way before they can move to a fiscal union. if you are talking about a common fiscal policy orifice cal u -- or fiscal union, they are way off. >> what is your opinion of how the banks look, will they sell assets, and deposit, from the capital banks? >> the issue going forward. if you are well capitalized can you resolve a bank if it runs into problems. there i have seen recent debates among regulators. and the mood seems to have swung from having very sophisticated systems of separating these two simply say, since it will be very difficult, let's just
embark on the general road that we will ask a lot more capital. so a big part of the new banking regulation will actually be quite substantially higher capital than even what was agreed upon. >> the second one is banks need make sure they sccan be resolvable. >> ubs is one of the leaders in terms of capital, based on the rules, you have been deleveraging for a while now? >> we have. we will under strategy, 2015, reduce our funded balance sheet from $900 billion to $600 billion. the future of ubs, we focus on what ubs can do best. >> my thanks to axel webber of ubs. for analysis on the week, the news and other news from ubs, jonathan galub, chief stralt gist at ubs, mike santolli, chief of finance at yahoo!. what a rough week. in addition to all of the news
surrounding the boston marathon, we have got selloffs in gold, other commodities, put this all to perspective for us as we look ahead to next week. what has investors concerned? >> seems like in the midst of an economic growth scare almost right on schedule. each spring we have had one of these things. right now taken a tone of, worried about deflationary forces, inflation expectations are down. commodities are suffering. asia growth not what we would hope. companies reporting earnings that in large part are kind of reaching estimates. but they're not saying they have very strong demand growth, revenue growth is slow. a choppy period in terms of looking at the outlook for the second half of the year when we were supposed to be getgetting economic growth. >> shocking events this week, boston, the bombings. the bombings were reported monday during what had already been the worst drop for stocks of the year. things worsened after that. as an investor, what impact do these unforeseen tragic events
have on confidence, uncertainty. how do you navigate that? >> you know this is a personal tragedy and i think as americans we feel, horrible about this, our hearts go out to the people of boston, the families. end of the day this really is not a market event i's possible that, we'll find out out more this is part of something more sinister. does ant pen't appear to be. market selling off for the reasons mike laid out. fundamentals haven't been there to support the run. you are getting a growth scare. data coming in. economic news is telling you that things are slowing down a bill. market is responding. >> would you advise clients in that sa thein scenario, take mo the table. diversify out of stocks, or look long term and not worry. >> everything is time frame. if you said you are a two, three year investor. stocks are higher going forward. pace may be slower. you are fine. if you are trying to pick an
entry point. do i think you will do belter in six weeks, eight weeks, ten weeks, from now. probably. i would let this flush out. slowness we are seeing. then decide when to get back in. >> maybe we will see a selloff getting an opportunity for investors at lower prices. >> i think you will. >> you think we will. earning season. a lot of companies beating earnings expectation, revenue has been slow. what does first quarter reports tell us so far about the rest of the year? any indication from your standpoint in terms of the health of corporate america and guidance. >> america is healthy, balance sheets. running businesses lean. i think back half of the year. global companies are saying, there isn't really a go-to region that is going to be carrying us for the next several months. saw warnings among the big companies. europe back in recession. i feel like come pans are doing what they can. profit margins are so high. they have kind of, you know gotten all the change from out
of the couch cushions to make numbers. not that they have organic growth. >> earlier this week, i spoke with the world's largest money manager, the asset, money management companies that are doing very well because of the market. being so strong. listen to what he said in terms of the backdrop for this market. take a listen. >> corporate earnings, so far, about 85% of the companies reporting exceeded estimations. it is an indication of -- of -- of a stronger economy. if somebody told me we would have a 5% correction i would say look at that as an opportunity to get into the market. >> which is basically what you just said, jonathan, right? >> yeah, i do think larry is perhaps a lit totle too optimis. cull pans are beating the quarter and missing revenue estimates. if you take out financials because of special, some things are specific to their sector,
you really are seeing negative earnings growth not compared to prior quarter but a year ago. things are weak. domestic companies doing much better than companies with big global footprints. >> what are you expecting from the week ahead? more heavy earnings numbers coming out. brig group of companies. and the gdp end of the week. >> i think actually for the reason. a lot more chop in the market. a lot of two way action. company specific. i think we have to get a little bit of clarity on whether companies feel this is just a little rough patch. we are going to pick up on the back end. there is an interesting wrinkle below the surface of markets. most stocks have gone down more than 5% already. though the indexes were down less than that. i feel like the question is going to be, if we actually get through this period of slowdown, perceived slowdown, whether the companies that are globally cyclically sensitive are baking in that weakness and might be taking the baton for the next phase in the summer lets say.
>> gentlemen. grit to talk with you. thank you so much. stay with us "on the money" talking the security impact after the boston bombing, a counterterrorism expert formerly with the nypd. and read all about it, when some in the newspaper business are shedding staff, and pages, the ceo of the hearst organization is investing in what you read. we will be right back. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪
krole. mitch, wonderful to have you on the program. thank you for spending the time. >> thank you. >> good to see you. after handling counterterrorism effort for the nypd, give me your thoughts on what happened friday. let's go back, the shootout with one of two suspects. both brothers. shutting down the city of boston. lockdown, what can you tell us? >> what likely happened as of late thursday is the fbi and the investigation hit some road blocks. they weren't sure which way to go. one route to go is to put pictures out of the particular individuals. and that may in fact have smoked these two individuals out, caused them to take action. >> what is your thought, what is your thought in terms of these two individuals? i mean we know that, that this is not necessarily you know international terrorism, is it home groernwn, what do you glea from what we know about the two individuals? >> what we know so far they're
likely to have radicalized here in the united states having come here as refugees in a sense from the chechnyian conflict. it is likely, their radicalization, turn to violence happened there. the questions we'll be exploring are what triggered that? why did they turn against the country that took them in? >> do most cities have the resources they need to combat terrorism? >> you know, most major cities are reliant on the fbi and the joint terrorism task force. reallies the sole element of focusing on terrorism in their cities. new york city has a bit of a luxury, in the sense that the mayor and police commissioner have devoted an effort to have an additional indigenous effort by the nypd to complement what the federal government are doing. new york is unique. most other cities are getting help from the federal government. >> what would you say happens next in terms of the way this
country, you know, operates differently as it relates to security? now we know what has taken place in boston. we have zeroed in on the person trap toperson -- the perpetrators. how would things change going forward? >> one thing we will see, people questioning once this gets resolved, you know, were there any signs that anyone could have detected at an earlier basis that would have given us a head up this was coming? was there suspicious travel? friend, family that saw these two individuals and the rest of the group potentially radicalize and change? one of the things people exmror. depending on what answers are will affect changes in security. >> the video and cameras have been so important to this. i mean, getting the public engaged. sending in videos from their cameras and what have you. there is so much data.
how do you sift through it all? what is going on now in terms of those, the powers that be looking through all of this video and data that we have? >> yeah, it is frankly a big data problem. what is happening is that you have got analysts who are sifting through all of this digital video on these individuals. new tools have come out that allow you to search for criteria. color of a shirt. color of a bag. things that may make it more e fish end. this is a place where the government invested a tremendous amount of investment, into analytic tools that can cut through big data and bring you to anomalous behavior or information that can give you the needle in the haystack. >> anything based on what we know right now that lead you to understand better the core of why this happened? and, and, who is associated with this? >> well, i think, understand, a little bit about their ethnic heritage suggests that chechnya
was an important part in their turn to violence. the fact that they dent put out a statement claiming responsibility, saying in whose name they carried this out. you know it still leaves some questions. >> mitch, good to have you on the program. thank you for joining us. mitch silber here. >> thank you. >> will the print industry have to stop the presses? how changing taste is changing news? and how a ceo says the reports of death of newspapers is an exaggeration. look for us on facebook. back in a moment. [ female announcer ] the only patch for the treatment of mild to moderate alzheimer's disease
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as more news and information is delivered digitally does it stop the presses for traditional print industry. my next guest says consumers want to read all about it online and in print. ceo of hearst corporation. frank, good to have you on the program. >> good to be here. >> you have been at the helm of the hearst corporation for 50-plus years. >> been there, for 50 years. been at the helm for 2. >> been at hearst more than 50 years. congratulations on that amazing tenure at one company. tell me about what you see in that 50-plus years, how the world has changed? what any most striking? >> well the first time i was ceo, i have had two tenures, one was 23 years. i retired. i flunked retirement. they brought me back. and this tenure is five years. dramatic between the first 28 and five is something that i often talk about. the big debate that i hear and
that is in my own mind is -- what was the biggest change? everybody wants to know that. and i still have to go with television being a bigger change in the world and in our lives than digital. digital may become that. we are still in the third inning, let's say of the digital revolution. >> i would have to tend to agree. television was a bigger phenomenon. >> worldwide. >> at the time. >> right. and still, on the impact on our lives. people are still watching more television than ever before. despite the digital revolution. >> is print media dead? >> no. by no means. the way it is delivered is changing dramatically, obviously. i think, ink on paper which is still a part of our business although a minority part of our business will be with us as far assite can see. we we -- as i can see. we will be delivering print on
platforms as far as anybody can imagi imagine. >> you are doubling down on print. investing. $15 million in a printing press. in albany new york. you own only the paper in the world, buying a printing press at time newspapers are cutting back on staff, cutting back on addition, some closing down entirely. so who are you trying to reach and, and how long will those readers be around? >> we still believe the most affluent and most educated of the population want to consume print. and many of them still like it the old-fashioned way. others, the more affluent of course, have a variety of ways they receive it. they take it at home, ink on paper. they take it on their ipad. they now take it on their cell phone. so, that -- the medium itself is a long way from being over. >> obviously, hearst publishes 300 magazines globally. your company's portfolio is diverse. $9 billion in revenue last year.
you own buzzfeed, half of fitch ratings and television interest, and tell me how you see the business changing. >> part of our success has been the fact that we have diversified. many of our contemporary companies, remember, we are 125 years old, stay too long at one stand. our strategy was diversify. become more electronic. that led us to go from three television stations to 29 television stations. to launch with abc what is now a & e, history, lifetime all the cable networks. we invested in espn. that diversification meant that we were not too reliant on any one product. and so, combination of acquisitions and new starts, built a company that is today about 15 times, maybe larger than, when i became ceo and about 30 times more profitable. >> documentary, based on hearst,
125th anniversary, on bio channel, april 23rd, the perspective on william randolph hearst, founder. >> in our 125th year, we asked an award winning producer, leslie iworks to do a documentary. we gave her complete latitude to tell the story the way she wanted to tell it. she has done a nearly two-hour documentary that is history of the company including the last, 30, 40 years i have been around. >> we will be watching. >> frank. congratulations. what a phenomenal career. >> thank you. >> you have seen so much. joining us, the ceo of hearst. >> up next, a look at the news this week that will impact money. we take a break. look at how the stock market ended the week. back in a moment. welcnew york state, where cutting taxes for families and businesses
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in sell bracelebration of earth. march's existing home sales released. follows by new home sales report tuesday. thursda thursday, dedication of the george w. bush presidential center at southern methodist. thursday, gdp. gdp, a market mover that measures the country's economic output. that will do it for today. thank you for joining us. next week, a special episode for you with technology leaders changing today's economy. i'm giving them a seat at the table. >> trust is the new currency. >> trust is the new currency of the new economy. >> we'll bring that to you next week. have a great week, everyone. i'll see you next weekend. ♪ is its own reward. but there's nothing wrong with enjoying a little extra reward. ♪ that's why southwest